DMV overcharged for costs of handling personalized license plates, dipped into other funds for expenses

Special license plates that the state DMV issued, renewed or transferred in 2011-12

Sacramento 
The California Department of Motor Vehicles overcharged by $6.3 million for its costs in handling personalized license plates, a new state audit has found.

The plates, which allow people to spell out their own messages, can cost motorists $49, plus $38 a year to renew, and the money is supposed to help the environment. The state can dip into the environmental fund to cover its costs, but the Bureau of State Audits found that they were not all justified.

DMV officials are responsible for collecting fees for personalized plates, plus a range of special-interest plates for Lake Tahoe, Yosemite Valley and other causes. The plates feature icons such as palm trees, a hand print, a firefighter or a whale tail.

The state is supposed to deposit the money in accounts for special use, such as the environmental fund for personalized plates, or an arts fund for the plates with palm trees and a sunset. Proceeds go to efforts such as maintaining beaches and public coastal education programs, benefiting county veterans offices or firefighter support.

Auditors reviewed four of the agencies — the California Emergency Management Agency, the Commission on Peace Officer Standards and Training, the California Department of Food and Agriculture and the ScholarShare Investment Board. Those agencies used revenue from the Antiterrorism Fund and the California Memorial Scholarship Fund.

In addition to overcharging for personalized plates, the state undercharged other funds by $1.1 million 2009-10 through 2011-12, the audit found.

Some funds were not spent as promised, the audit found, such as portions of the anti-terrorism fund. The state’s emergency management agency used some to cover an employee’s leave pay. Food and Agriculture spent $896,000 on employee compensation, software costs, building leases and contract payments.

“Both Cal EMA and Food and Agriculture used money from the antiterrorism fund to pay the entire salaries of certain employees whose duties include activities related to both natural and man made disasters,” the audit says. “However, neither state agency could provide signed time reports or other documents to support that the employees worked exclusively on activities to mitigate terrorist acts.”

Parks and recreation and natural resources also could not provide full documentation of their spending of license-plate revenue on promised programs. Natural resources paid for an executive salary entirely from the environmental fund even though the executive’s activities benefited other programs, the audit says.

The audit also found that the state lost out on $22 million in revenues over two years by failing to collect fees allowed by law for special license plates, according to the audit. For example, the law specifies a fee of $99 for a personalized Olympic Training License Plate, but the DMV application shows an initial issuance fee of $50.

The DMV also failed to collect $12 million in retention fees from motorists who kept their commemorative plate but did not use it on their vehicle, the audit found.

“This report concludes that the state has not collected all revenue due from special plates and has spent some of the special plate revenue on expenditures that were unallowable or unsupported,” Auditor Elaine Howell wrote in a letter to Gov. Jerry Brown and state lawmakers.